Wednesday, January 27, 2016

Article review- “Patriarchy, Power, and Pay: The Transformation of American Families, 1800-2015”

George Masnick
Senior Research Fellow

At my
age, there is little that makes my jaw drop, especially while reading an
article in one of my professional journals. However, this is exactly what
happened when “Patriarchy, Power, and Pay: The Transformation of American
Families, 1800-2015” by Steven Ruggles appeared in the latest issue of Demography. (Another almost identical
version of this paper is available free of charge here.) What struck me as amazing is
the way Ruggles provides a long-term perspective on many of the demographic and
economic trends taking place today that I have studied using a much shorter
time frame. And by long-term, we are talking 150-200 years!

The Joint Center for Housing Studies' early effort to describe changes in household
structure and the labor force participation of American womenThe Nation's Families, 1960-1990– adopted a temporal perspective from 1960-1990. Published in 1980, we thought at the time that a
three-decade perspective was all that was needed to understand the dramatic
changes of that era. Wrong! The longer historical perspective sheds much more light
on the origins of today’s demographic shifts, particularly in household
structure, and what they might mean for housing.

Ruggles
begins with the trend in the share of persons age 65+ who live in
multi-generational families. We have noted the increase in this household type
during the past two decades, primarily due to the increasing share of Hispanic
and Asian immigrants for whom multi-generational residence is more common, and
have speculated about its implications for housing consumption. But since we housing researchers rarely
look at trends spanning more than 30 or 40 years, we have no sense of whether
the upward trend in multi-generational living is indeed all that significant.

Ruggles’ Figure 1, reproduced below, shows how slight the recent turnaround has been relative
to longer-term historical levels. The high share of the labor force based in an
agricultural economy drove the very high historical incidence of older
Americans living in multi-generational households. Three quarters of the labor
force in 1800 worked in agriculture, and farm labor still was in the majority
in 1850 when the share of 65+ living in multi-generational families was also 75
percent. Ruggles explains convincingly why an agricultural based economy tied
the generations together, and why the rise of wage labor off the farm split
them apart.

Ruggles’ main theme is that the decline of what he calls the “corporate family” – those
working in agriculture and other (often related) family businesses – and the gradual
transformation of the workforce to include first only male breadwinners, and
later dual earner and female breadwinner households – had the effect of making household
structures both simpler and more fluid. Once again, his long-term perspective
is enlightening in looking at the recent trend in such things as delayed
marriage and divorce. Age at first marriage for both men and women has been
rising steadily since 1960, and he predicts that the share of never-married
40-44 year old women will almost double in the near future, rising from 15
percent in 2010 to about 28 percent in 2030. Similarly, the rate at which
married women are divorcing has increased steadily since 1960, showing no sign
of this trend slowing. Consequently, the share of all households without a
married couple present – which held near 20 percent between 1850 and 1950 – has
risen to over 50 percent in 2010, and continues its upward trajectory.

Nor is
it simply the case that young adults are just trading marriage for cohabitation.
To be sure, this is happening to some degree, but Ruggles notes that the share
of 25-29 year olds without a co-residing
partner has grown from 23 percent in 1970 to 48 percent in 2007 to 54 percent
today. The fastest growing household type is single-person rather than
cohabiting couples, as more and more adults of all ages who never married, are separated/divorced,
and are widowed live alone.

If the
household is the unit of both production and consumption, greater fragmentation
and instability in household structures is troublesome. The primary household production
good today is the next generation, and the U.S. appears to be following the lead
of many European countries in developing fertility levels below replacement. Nothing
that Ruggles presents in his paper provides comfort that the recent declining fertility rates are simply due to the lingering effects of the Great Recession and will likely
reverse themselves.

One
contributing factor to declining fertility may be trends in income. Households have
always provided the mechanism for combining incomes. To Ruggles’ dismay,
the evolving global economy is leaving more American households without secure
incomes. The long slide in the relative earning power of young men over the
past 40 years has been mitigated by the steady rise in employment of wives. But
now that fewer and fewer households contain a married couple, and given that
women’s real wages have also begun to decline, aggregate household incomes for
married couples has begun to decline as well. Ruggles
suggests that the largest source of decline in economic opportunity for young
people, especially over the past two decades and in future decades, may be the
automation of both manufacturing and services made possible by new
technologies.

Housing consumption broadly should follow the downward trends in
employment and income. Boosting household formation and homeownership rates,
especially among the young, will require a reversal of many of the long-term demographic
and economic trends that Ruggles discusses.

Ruggles’ article has sixteen figures, some only going back in
time to 1940, but many spanning 150 or more years. I highly recommend you take a look. Some will surely make your
jaw drop too.

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